It’s been another volatile few weeks in the markets. We are now solidly in a bear market: stocks have been tumbling since August, and the Dow and S&P 500 have recently hit their lowest closing levels since 2020. Inflation is still hovering way too close to the 40-year high that it hit in June, and the Fed has said that it will continue to raise interest rates into 2023.
As we’re reading about all of this and looking at our portfolios, it’s easy to get fixated on what’s rising and falling by the day — even by the hour. A survey from Ally Financial found that one in five consumers have closed an investment account over the past year because of concerns about inflation and stock market volatility. And I get it — we’re all seeing a lot of red right now. But pulling out right now just means locking in your losses, because we know that history is on our side, and has shown us that there will be a rebound coming. And we wanna be there for it. Because we’re not just looking to make a profit today or tomorrow, but 10, 20, or 30 years into the future.
That’s why it’s so important for us to take a deep breath, and then just to zoom out for a bit. While this economy feels unprecedented in so many ways, the stock market has already gone through countless swings in its lifetime. And the best way for us to understand this current downswing is to look at the past. What are the historical trends in the markets that we should know about, and how do they affect us now? How can we learn from the mistakes that investors before us have made? And what are the tried-and-true investing strategies that we need to hold onto now, more than ever?
Luckily, we’ve got an investing veteran with us on this episode, to answer all of our questions: Bob Pisani is a Senior Markets Correspondent for CNBC who has reported on Wall Street for 25 years. He has seen it all — he was on the floor of the New York Stock Exchange during the dot com bubble, the stock market crash in 2008, the start of the pandemic, and everything in-between. He’s also the author of the book Shut Up and Keep Talking: Lessons on Life and Investing from the Floor of the New York Stock Exchange.
Listen in as Jean and Bob discuss the birth of electronic trading, the growth of passive investing over active investing, and why it’s important to reflect on the history of the stock market.
Bob also discusses investing pitfalls and shares some of the most common mistakes that he’s seen investors make over the years.
Bob tells us what facts and numbers he focuses on to measure how well the markets are doing, and the investments that he owns. (He also tells us why he prefers the “boring” investments to the “exciting” ones, for serious, long-haul investors.) He tells us the elements of the economy that people should really be focusing on right now, and whether or not some of the big global market movers we’re seeing right now should change our investment strategy.
In Mailbag, we hear from a listener who is being paid in crypto for her new job. Jean also advises a woman launching a small business — a gluten-free bakery — on her next steps. In Thrive, we look at interesting — and free — options for things to do on your next layover.
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